Panama’s top court has invalidated a concession allowing Hong Kong’s CK Hutchison to operate ports at both ends of the Panama Canal, prompting a strong rebuke from Hong Kong’s government and raising questions about the future of the strategic waterway.
The ruling came after an audit by Panama’s comptroller alleged irregularities in the 25-year extension of the concession granted in 2021.
Hong Kong Condemns the Ruling
In a statement Friday, Hong Kong’s government said it “firmly rejects” the court’s decision, warning that it undermines the legitimate business interests of Hong Kong companies abroad. Officials criticized what they described as coercive or unreasonable actions by foreign governments in international trade, emphasizing the broader risks to investor confidence.
The announcement stressed that the ruling could have far-reaching consequences for businesses that operate under complex international arrangements.
Geopolitics at the Canal
The court’s decision comes amid ongoing US concerns about Chinese influence over the Panama Canal. Washington has long prioritized limiting Beijing’s reach in the region, with former President Donald Trump suggesting the canal should even return to US control.
US Secretary of State Marco Rubio also flagged the port operations as a national security issue during his first overseas visit to Panama, despite repeated assurances from Panama’s authorities that China does not influence canal operations.
The court offered no clarity on the immediate impact of its decision on port management.
CK Hutchison Faces a Complex Situation
Panama Ports Company, CK Hutchison’s subsidiary operating the ports, said it had not been formally notified of the ruling but defended its concession as the result of a transparent international bidding process. The company warned that the decision threatens both its contract and the livelihoods of thousands of Panamanians who depend on port activity, while also undermining legal certainty in the country. It is reserving the right to pursue legal action locally or abroad.
The controversy also touches on a stalled deal announced last year, in which CK Hutchison planned to sell its majority stake in the Panamanian ports and other global holdings to a consortium including BlackRock. The sale reportedly faced objections from Beijing, prompting the company to consider adding a Chinese investor — a move seen as an attempt to appease the Chinese government.
The situation highlights the difficult balance Hong Kong business leaders must maintain between international commercial interests and Beijing’s expectations of political loyalty, particularly amid tense US-China relations.
